Minimum wage hike could mean higher prices for consumers

AP File Photo

Hawaii’s lowest paid workers are about to get a few extra bucks in their paychecks.

But it could ultimately end up costing you, the consumers, more.

Right now, the state’s hourly minimum wage is $7.75/hour. In two days on Jan. 1, it will go up to $8.50, to $9.25 in 2017 and $10.10 in 2018.

“Most of my money goes to rent, car payments, insurance, everything,” said Michelle Young, bartender/server at Side Street Inn.

That’s why any bump in pay is welcome. But Young does not know how much it will help.

“Because I rarely get paychecks. Because after taxes and insurance and everything, we get may $20 or $30,” she said.

Young works at Side Street Inn, where a third of employees will be affected by the jump in pay. But it will cost the company more than $36,000 next year.

“Whenever we got changes like that, minimum wage, it’s a trickle-down effect,” said operations manager Rob Acoba. “So basically everything has to be adjusted from the menus to the pricing structure to the costs of the food.”

That means raising items on the menu 25 to 50 cents each.

“We hate to do that, but we got to just to survive,” Acoba said.

At Watanabe Floral, the new minimum wage will not affect the company too much since the pay of only three workers will be adjusted.

But what doesn’t help are other increases, including the cost for medical insurance.

“From last year to this year, there’s a 50 cent to $1.75 per hour increase in medical charges per employee,” said Monty Pereira with Watanabe Floral.

The company has found other ways to save money so they do not pass on increased costs to customers.

“We changed our light bulb structure in here, as well as put certain machines on our coolers that help manage the amount of energy that’s going through there,” Pereira said, which could help the company save up to $60,000 a year.


§387-2 Minimum wages. (a) Except as provided in section 387‑9 and this section, every employer shall pay to each employee employed by the employer, wages at the rate of not less than:

(1) $6.25 per hour beginning January 1, 2003;
(2) $6.75 per hour beginning January 1, 2006;
(3) $7.25 per hour beginning January 1, 2007;
(4) $7.75 per hour beginning January 1, 2015;
(5) $8.50 per hour beginning January 1, 2016;
(6) $9.25 per hour beginning January 1, 2017; and
(7) $10.10 per hour beginning January 1, 2018.

(b) The hourly wage of a tipped employee may be deemed to be increased on account of tips if the employee is paid not less than:

(1) 25 cents;
(2) 50 cents per hour beginning January 1, 2015; and
(3) 75 cents per hour beginning January 1, 2016,

below the applicable minimum wage by the employee’s employer and the combined amount the employee receives from the employee’s employer and in tips is at least 50 cents more than the applicable minimum wage; provided that beginning January 1, 2015, the combined amount the employee receives from the employee’s employer and in tips is at least $7.00 more than the applicable minimum wage. [L Sp 1941, c 66, §3; am L 1943, c 159, §2; RL 1945, §4353; am L 1945, c 15, §1(2); am L 1953, c 77, §1; am L 1955, c 15, §2; RL 1955, §94-3; am L 1957, c 256, §1; am L 1962, c 16, pt of §2; HRS §387-2; am L 1969, c 36, §3; am L 1974, c 14, §1; am L 1978, c 4, §1; gen ch 1985; am L 1987, c 224, §1; am L 1990, c 34, §25; am L 1991, c 264, §2; am L 2001, c 279, §1; am L 2005, c 240, §3; am L 2014, c 82, §1]

Cross References

Service charge disclosure when not distributed as employees’ tip income, see §481B-14.

Case Notes

Defendants not entitled to summary judgment; in appropriate circumstances, porterage may be considered in the nature of “gratuities” for the purposes of §387-1 and this section; plaintiffs raised genuine issue of material fact as to whether “porterage” is a “gratuity of any kind”. 78 H. 351, 893 P.2d 779 (1995).

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